Flood insurance reform fight heats up

Local officials are fighting to change new federal rules that could bring massive flood-insurance cost hikes to home and business owners.

Xerxes WilsonStaff Writer

Local officials are fighting to change new federal rules that could bring massive flood-insurance cost hikes to home and business owners.Two resolutions have been successfully pushed by local officials seeking to reverse effects of the Biggert-Waters Flood Insurance Reform bill.Residents of parishes to the east of Lafourche and Terrebonne have packed meetings after learning their flood insurance costs will rise from hundreds of dollars a year to thousands. Flood-prone neighborhoods are looking at tens of thousands of dollars, and officials fear Terrebonne and Lafourche could soon be in the same situation. “The Biggert-Waters Act will have devastating effects on all coastal parishes,” said Terrebonne Parish President Michel Claudet. “Sadly, the act has many unintended consequences and may do more damage to local communities than the natural disasters we have felt in the past.”Officials fear the reforms will reduce property values and thus reduce the parishes' tax collections. The Terrebonne Parish Council passed a resolution Monday urging the local congressional delegation to fight to amend Biggert-Waters and for the Federal Emergency Management Agency to delay the release of new flood maps. North Lafourche Levee District Director Dwayne Bourgeois pushed a similar resolution last week that was unanimously accepted by the Association of Levee Boards of Louisiana.Both resolutions share three similar areas primarily focused on protecting current property owners:-- Suspend implementation of new flood maps until accuracy in assessing flood risk is assured. -- Give communities one year for enrollment into the flood insurance program before rates increase and allow current residents to keep the subsidized rates they enrolled with. As written, Biggert-Waters removes such subsidies.-- Allow properties sold or transferred to retain the subsidized rate. As written, Biggert-Waters would cause a property to lose any subsidy when it is sold. Officials fear this will devastate resale value. Any new construction after implementation of the maps would be subject to the Biggert-Waters reforms.Reform of the national flood insurance program has been in progress for years. The National Flood Insurance Program was started in 1968 to provide federally backed flood insurance. The program was financially stable for decades before the storms of the past decade accumulated a $27 billion debt, Bourgeois said. There are two efforts being taken to bring the program back to solvency. Residents will first see the effects of Biggert-Waters, which removes federal subsidies that make flood insurance more affordable in high-risk areas. Then new flood maps will be used to calculate insurance rates based on actual risk. But they have not been released in Lafourche or Terrebonne, and local officials said early drafts of the maps do a poor job of calculating actual risk. Bourgeois and the Terrebonne Council are asking that these maps be put on hold until there are methods for properly determining risk with consideration to local flood protection measures. Parish officials got a glimpse at preliminary maps in 2008, but they disregarded the existing levee systems such as those in south Lafourche because they are not certified by the U.S. Army Corps of Engineers. Bourgeois said the maps consider other land formations but not if they are called levees. “It caused some very bad mapping that had no correlation to features on the ground in some cases,” Bourgeois said.The parish appealed the maps and were told FEMA was working on a way to calculate protection provided by non-certified levees. That was March 2011, and it is unclear today how levees will be considered in the maps, Bourgeois said. The maps will reflect elevation relative to flood risk that will be used to set the new flood insurance rates. The reforms of Biggert-Waters will remove grandfather clauses that have allowed homeowners to keep their original flood risk ratings even when risk was updated with new maps.The resolutions call for property owners who renew their insurance or purchase insurance during a one-year grace period to be allowed to keep their subsidized rates until they lapse in their policy or the property is destroyed or abandoned. The resolutions also call for properties to be allowed to keep the subsidized rates even if ownership changes. Bourgeois said such a provision would help protect property values. He noted, for example, that a $300,000 home's valuation will plummet if a prospective buyer is faced with $10,000 in annual flood insurance costs. “It's not fair to the people who have invested down here and paid their insurance for years,” he added. Terrebonne's resolution also calls for provisions regarding the insurance program's finances, buyout properties and renovation permits. A group of coastal government officials are in Washington D.C. on Tuesday to advocate for such reforms.

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